Bitwise Solana ETF exceeds US$1 billion, network accelerates deflation plan

Bitwise Solana Pledged ETF asset management scale exceeds US$1 billion, and the Internet accelerates deflation.

Bitwise launched the Solana Pledged ETF (BSOL) to become the first Solana-related exchange-traded product with an asset management scale exceeding US$1 billion. This milestone has been achieved in less than a year since its launch. This achievement reflects the continued rise in demand from institutional and retail investors for Solana exposure amid accelerating activity in both the ETF market and underlying asset trading.

ETF capital inflows and institutional holdings

BSOL's trading volume exceeded US$126 million last Friday, setting its best single-day performance. In the previous seven trading days, the cumulative trading volume exceeded US$500 million. The fund has achieved net inflows for seven consecutive trading days. During this period, Solana-related exchange-traded products attracted a total of approximately US$1.26 billion, accounting for approximately 2.2% of SOL's total market value. This rapid pace of capital allocation highlights the significant shift in institutional attention to Solana and is no longer limited to Bitcoin and Ethereum-related products.

DeFi Dev Corp, which is active in the decentralized finance field, recently increased its holdings of 19,000 SOLs, worth approximately US$1.86 million. After this increase, the company currently holds approximately 2.33 million SOLs, or approximately US$182 million based on current market prices.

Crypto asset manager Bitwise also reported that its XRP ETF continues to receive capital inflows, with an increase of US$15.4 million and an asset management scale of approximately US$603 million.

BSOL's trading volume exceeded US$126 million last Friday, its strongest performance in a single day;Solana ETF's total inflow reached approximately US$1.26 billion, reflecting rapid growth in investor demand.

The derivatives market drives price volatility

SOL's recent volatility has intensified, with an increase of nearly 19% in the past week. It then encountered resistance and some selling pressure. The token was last quoted at US$103.43, down 2.25% in 24 hours, and its market value is approximately US$60.42 billion.

SOL futures trading volume surged, with derivatives market trading volume reaching approximately US$14.6 billion, compared with only approximately US$1.7 billion in the spot market. This huge gap highlights the role of leveraged derivatives in amplifying price fluctuations.

Trading activity remains active despite recent price declines. Total daily trading volume fell 16.15% to US$4.94 billion, and the trading volume to market ratio was 8.17%.

The interaction between ETF inflows and high futures trading volume has further complicated SOL's recent price movements. Institutional capital inflows may create continued buying demand, but leveraged positions will quickly intensify upward or downward price fluctuations as futures contracts open or close.

The combination of rising ETF demand and high derivatives activity presents a more complex picture for SOL-institutional capital inflows bring buying pressure, while leveraged futures add to volatility.

Solana's New Deflation Policy

Solana validators have approved a proposal to accelerate the process of cyber deflation, the first measure passed through Solana's new on-chain governance mechanism. The proposal, called SGP-0002 ("Double Deflation"), would increase the annual deflation rate from 15% to 30%, while maintaining the long-term inflation target at 1.5%.

The final results showed that 67% of the pledgers voted in favor, 25.16% opposed, and 7.84% abstained. According to official results, the voting rate accounted for 60.7% of the qualified pledges.

Analysts at Solana Compass estimate that the new plan means Solana could reach a final inflation rate of 1.5% in 2.8 years, compared with 5.7 years previously. Approximately 18.9 million SOLs are expected to fall into circulation over the next six years, which may reduce the dilution effect for existing token holders.

However, a reduction in new issuance also means lower pledge rewards for verifiers and committers, creating a new trade-off between scarcity and revenue potential for network participants.

This monetary policy change introduces new variables for current and potential SOL investors, as the network also tightens its issuance plans while attracting more institutional interest.

Small Dictionary: SGP-0002 ("Double Deflation")

A Solana governance proposal that aims to increase the speed at which the Internet reduces inflation, with a view to reaching the long-term 1.5% inflation target in a shorter period of time and restricting new token issuance.

Solana institutional adoption prospects

The surge in ETF capital flows, increased derivatives activity and more aggressive deflation plans have combined to increase institutions 'focus on Solana. While these changes may benefit token holders by reducing dilution and lowering asset acquisition thresholds, the continued impact will depend on whether ETF inflows continue and whether trading momentum shifts from derivatives to underlying spot demand.